SOUTH Africa’s strong rand is forcing Impala Platinum to examine costs and boost efficiency, but plans to boost output may depend on Zimbabwe, the world’s second-largest platinum producer said on Wednesday.
Implats produces 1,8 million ounces of platinum per year and expects to boost this to 2 million ounces by 2006 and 2,3 million by 2008, mainly from imput from third-party producers and from holdings in Zimbabwe.
“In the short term, we have always expected some ups and downs in terms of political rhetoric from Zimbabwe. Zimbabwe is a long-term project, and we suspect in the short term problems will be resolved in the fullness of time,” chief financial officer David Brown said. Controversy has swirled over Zimbabwe’s plans to force firms to sell a portion of their companies to local black groups.
An initial draft suggested up to 50% would have to be spun off, but a later draft proposed 30%, more in line with South Africa’s black empowerment regulations.
Implats says 160 million ounces of platinum could be mined from its holdings in Zimbabwe, against only 35 million ounces remaining at its main mine near Rustenburg.
Implats executive director Cathie Markus said despite the strong rand the Rustenburg mine, which produces 1,1 million ounces a year, remained profitable but the company might have to look carefully at its operations in the eastern Bushveld.
“The rand is making us look more carefully at costs,” she said.
Implats’ South African operations were hit by a strike in October that cost it 44 000 ounces of platinum production, but the company did not expect to work extra hours to make this up, Brown said. — Reuter.